Conspicuous spending is yesterday's fashion. Modesty is the new trend. CNNMONEY
Related to that is our personal savings rate. As unbelievable as it sounds, the United States used to be a nation of savers. The 80's through the 00's brought in a culture of greed and excess. Thanks to easy access to credit, some people spent more money than they made. This helped to exacerbate our Great Recession. Unsurprising.
What's surprising is that Americans are once again a nation of savers The most recent personal savings rate is about 3%. That's better than -2%. Instead of dipping into credit cards and buying luxury items, Americans are being reasonable with their spending, buying things they can only afford.
Imagine that concept, buying only what you can afford. Modesty can be a mixed blessing in a time of recession, but I'll take reasonable spending over excessive spending any day.
- The Economist would say it's too soon to say the increasing savings rate will be permanent.
- The Gambler would wager this is a real culture shift. Luxury items are like cardigan sweaters. Who still buys them?
- The Investor is still afraid.
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